On Wednesday, H.C. Wainwright adjusted its outlook on Cullinan Therapeutics Inc. (NASDAQ: CGEM), formerly known as Cullinan Oncology, by lowering the price target to $29 from the previous $34 while maintaining a Buy rating. The revision follows the company's announcement to shift its developmental focus toward autoimmune diseases, specifically with its CLN-978 program.
Cullinan Therapeutics recently announced the discontinuation of enrollment in its Phase 1 study of CLN-978 for B-cell non-Hodgkin’s lymphoma (NHL). The company plans to pivot CLN-978, a bispecific monoclonal antibody that targets CD19 and CD3, towards the treatment of systemic lupus erythematosus (SLE). An Investigational New Drug (IND) application is expected to be submitted in the third quarter of 2024 to begin studying the drug in SLE patients.
The upcoming study for CLN-978 will involve a dose escalation to identify the target dose for further development and a dose expansion to examine dosing schedules in a larger SLE patient population. The primary goal of the study is to assess the safety of CLN-978 in treating active SLE, with secondary objectives including pharmacokinetics, B-cell kinetics, immunogenicity, and preliminary efficacy.
Cullinan Therapeutics envisions CLN-978 as a potential first-in-class, off-the-shelf, subcutaneous treatment that could modify the course of autoimmune diseases and offer a differentiated safety profile. This would be a significant shift from the current standard-of-care, which primarily focuses on symptom alleviation and requires ongoing immune suppression therapy.
The company has identified an estimated 122,000 SLE patients in the U.S. who could benefit from CLN-978 and anticipates an over $11 billion market opportunity for moderate to severe cases. Cullinan also has plans to explore the use of CLN-978 in other autoimmune diseases in the future. It is important to note that CLN-978 is not currently included in the firm's valuation model.
The price target reduction to $29 is attributed to potential dilution from capital raising activities.
InvestingPro Insights
As Cullinan Therapeutics Inc. (NASDAQ: CGEM) pivots its strategic focus towards autoimmune diseases, it's critical for investors to consider the company's financial health and market performance. According to InvestingPro data, CGEM holds a market cap of approximately $745.9 million, with a notable price uptick of 88.47% over the last six months, signaling strong market confidence in the near term. Despite the company's aggressive cash burn and lack of profitability in the last twelve months, CGEM's liquid assets still exceed its short-term obligations, which is crucial for sustaining its new research and development path.
InvestingPro Tips highlight that while CGEM is not expected to be profitable this year, the company has demonstrated a high return over the last year with a 57.85% price total return. Moreover, CGEM's strategy shift could tap into a significant market opportunity, as reflected in the company's strong three-month return of 63.46%. With more in-depth analysis available, investors can find additional InvestingPro Tips for CGEM, offering insights that could further guide investment decisions. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and uncover the full spectrum of investment strategies and metrics on the platform.
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